Dow Booms Past 12,000

The Dow Jones Industrial Average boomed past the 12,000 mark for the first time today. The economy is roaring along. Our internal politics focus on sideshows while ignoring the real successes out there.

The index of 30 big-name stocks surpassed the milestone just after trading began, rising as high as 12,049.51. The Dow had already set closing records seven times during the past two weeks.

It took the Dow 7 1/2 years to make the trip from 11,000, having been pummeled during that time by the dot-com bust, recession and the aftermath of the 2001 terror attacks. That slow trek was a striking contrast with the Dow's sprint from 10,000 to 11,000 in just 24 days in the spring of 1999, during the heady days of the Internet boom.

The Dow, whose stocks include blue chips such as International Business Machines Corp., Microsoft Corp. and Wal-Mart Stores Inc., has risen well over 300 points so far this month as oil prices retreated below $60 a barrel and it appeared the economy was headed for a soft landing after more than two years of interest rate increases.

The Dow's quick move past 12,000 Wednesday came after a Labor Department report indicated consumer price pressures are leveling off and third-quarter earnings reports from companies including IBM bolstered investors' confidence.

Seven record closes in two weeks time.

Misspellings On Public Documents

We reported a couple of days ago about a rather embarrassing omission that forced a Michigan county to reprint all of the ballots for this year's election. It seems they left out the letter 'L' when spelling 'public'. Ok, so it's funny and a few folks have red faces over it. But it frankly pales in comparison to this item:

The central bank of Kazakhstan can't spell the word 'bank' properly on its own bank notes.

The bank plans to put the misprinted notes — worth 2,000 tenge (8 pounds) and 5,000-tenge — into circulation in November and then gradually withdraw them to correct the spelling.

The move has drawn the ire of the Central Asian state's politicians who urged the bank to abandon the notes altogether.

"The mistake … is not just a spelling problem — it has political undertones," a letter from members of parliament to President Nursultan Nazarbayev said.

"We urge you to tell the National Bank not to put out the notes with a mistake in the Kazakh language."

We here at Blue Crab Boulevard wonder what the misspelled word actually means in the Kazakh language.

Rice Reaffirms Nuclear Umbrella

US Secretary of State Condoleezza Rice reaffirmed that the US will use the "full range" of military options to defend Japan. That would be diplo-speak for the US will use nukes to defend Japan against any aggressor. For now, Japan is saying it is not ready to enter a nuclear arms race in Asia.

The United States is concerned that Japan, South Korea or perhaps Taiwan may want to develop their own nuclear weapons programs to counter the threat from North Korea. Such moves would anger China, which already has nuclear weapons, and raise tensions in the region.

Part of Rice's assignment on this week's hastily arranged trip to China, Russia, Japan and South Korea is to lessen the temptation to develop separate national nuclear programs by reaffirming the U.S. intention to defend the nations most at risk.

In Japan, Rice said she reaffirmed President Bush's pledge, made the day of the North's test last week, "that the United States has the will and the capability to meet the full range — and I underscore the full range — of its deterrent and security commitments to Japan," Rice said following discussions with Japanese Foreign Minister Taro Aso.

Rice's words were a reminder to U.S. allies that the United States does not want to see a new nuclear arms race in Asia, but will likely be taken also as a warning to North Korea that it could face the U.S. nuclear arsenal if it used a nuclear weapon on a neighbor.

I do not know how long until the arms race kicks off. That will depend on how much more provocation North Korea provides and how weak the US is perceived by allies as our internal political disarray continues. When allied nations begin to doubt US will is when the world is going to be off to the races. Not good races, either. There will be no winners.

Lancing The Lancet

In today's Opinion Journal, Steven Moore takes a hard look at the much discussed Lancet study that claimed astronomical numbers of civilian casualties in Iraq. As Moore says, it is not that anyone is defending any civilian deaths, just that wildly inflating the numbers is a dreadful way to try to influence public policy.

After doing survey research in Iraq for nearly two years, I was surprised to read that a study by a group from Johns Hopkins University claims that 655,000 Iraqis have died as a result of the war. Don't get me wrong, there have been far too many deaths in Iraq by anyone's measure; some of them have been friends of mine. But the Johns Hopkins tally is wildly at odds with any numbers I have seen in that country. Survey results frequently have a margin of error of plus or minus 3% or 5%–not 1200%.

The group–associated with the Johns Hopkins Bloomberg School of Public Health–employed cluster sampling for in-person interviews, which is the methodology that I and most researchers use in developing countries. Here, in the U.S., opinion surveys often use telephone polls, selecting individuals at random. But for a country lacking in telephone penetration, door-to-door interviews are required: Neighborhoods are selected at random, and then individuals are selected at random in "clusters" within each neighborhood for door-to-door interviews. Without cluster sampling, the expense and time associated with travel would make in-person interviewing virtually impossible.

However, the key to the validity of cluster sampling is to use enough cluster points. In their 2006 report, "Mortality after the 2003 invasion of Iraq: a cross-sectional sample survey," the Johns Hopkins team says it used 47 cluster points for their sample of 1,849 interviews. This is astonishing: I wouldn't survey a junior high school, no less an entire country, using only 47 cluster points.

Many people, myself included, have denounced this study as a politically motivated hack job. Moore provides a couple of bits of information that show that this "study" is hideously flawed, which only reinforces the political motivation of the study:

Appendix A of the Johns Hopkins survey, for example, cites several other studies of mortality in war zones, and uses the citations to validate the group's use of cluster sampling. One study is by the International Rescue Committee in the Democratic Republic of Congo, which used 750 cluster points. Harvard's School of Public Health, in a 1992 survey of Iraq, used 271 cluster points. Another study in Kosovo cites the use of 50 cluster points, but this was for a population of just 1.6 million, compared to Iraq's 27 million.

When I pointed out these numbers to Dr. Roberts, he said that the appendices were written by a student and should be ignored. Which led me to wonder what other sections of the survey should be ignored.

….

Dr. Roberts said that his team's surveyors did not ask demographic questions. I was so surprised to hear this that I emailed him later in the day to ask a second time if his team asked demographic questions and compared the results to the 1997 Iraqi census. Dr. Roberts replied that he had not even looked at the Iraqi census.

And so, while the gender and the age of the deceased were recorded in the 2006 Johns Hopkins study, nobody, according to Dr. Roberts, recorded demographic information for the living survey respondents. This would be the first survey I have looked at in my 15 years of looking that did not ask demographic questions of its respondents. But don't take my word for it–try using Google to find a survey that does not ask demographic questions.

You have a complete invalid methodology here. As Moore points out, the lack of demographic data alone make the survey impossible to prove - or contradict. In other words the results cannot be replicated. That alone has always been enough to invalidate a study in the sciences. As I have said before, even opponents of the war should not want to promote lies to advance their agenda.

UPDATE: Others: Sundries Shack, Confederate Yankee, Penraker, Fausta, Kesher Talk, Volokh Conspiracy, STACLU, Cold Fury, Decision '08, Sister Toldjah,

The High Ground

The Washington Post notes the new space policy that the White House announced this month. They make a great deal out of the sections that deal with a US rejection of any constraints on its actions in space and asserts a right to deny hostile nations the use of space. In other words, the US right to defend its extensive interests in space. This policy is almost identical to one issued by Clinton in 1996, apparently.

"Freedom of action in space is as important to the United States as air power and sea power," the policy asserts in its introduction.

National Security Council spokesman Frederick Jones said in written comments that an update was needed to "reflect the fact that space has become an even more important component of U.S. economic, national and homeland security." The military has become increasingly dependent on satellite communication and navigation, as have providers of cellphones, personal navigation devices and even ATMs.

The administration said the policy revisions are not a prelude to introducing weapons systems into Earth orbit. "This policy is not about developing or deploying weapons in space. Period," said a senior administration official who was not authorized to speak on the record.

Nevertheless, Michael Krepon, co-founder of the Henry L. Stimson Center, a nonpartisan think tank that follows the space-weaponry issue, said the policy changes will reinforce international suspicions that the United States may seek to develop, test and deploy space weapons. The concerns are amplified, he said, by the administration's refusal to enter negotiations or even less formal discussions on the subject.

"The Clinton policy opened the door to developing space weapons, but that administration never did anything about it," Krepon said. "The Bush policy now goes further."

So what? We should sit back and unilaterally refuse to allow for the defense of our increasingly necessary space assets? I don't think so. Nor do defense experts:

The U.S. position flows in part from the fact that so many key weapons systems are now dependent on information and communications from orbiting satellites, analysts said. The U.S. military has developed and deployed far more space-based technology than any other nation, giving it great strategic advantages. But with the superior technology has come a perceived vulnerability to attacks on essential satellites.

The new policy was applauded by defense analyst Baker Spring of the conservative Heritage Foundation. He said that he supported the policy's rejection of international agreements or treaties, as well as its emphasis on protecting military assets and placing missile defense components in space. He also said that he liked the policy's promotion of commercial enterprises in space and its apparent recognition that private satellites will need military protection as well.

The issue of possible hostilities in space became more real last month when National Reconnaissance Office Director Donald M. Kerr told reporters that a U.S. satellite had recently been "painted," or illuminated, by a laser in China. Gen. James E. Cartwright, the top U.S. military officer in charge of operations in space, told the newsletter Inside the Pentagon last week that it remained unclear whether China had tried to disrupt the satellite.

We neglect this latest development at our collective peril. If we yield the high ground we are all at risk.

UPDATE: Others: Penraker, Defense Tech,

The Problem With Believing Your Own Hype

This IS the morning for questions, isn't it? Apparently there are enough insiders and Democratic operatives who think the party has an enormous advantage that they are pleading for huge gobs of cash to target additional House districts.

Top Democrats said yesterday that they are planning to significantly expand the number of GOP House seats they will target during the final 20 days of the campaign but that financial disputes and fundraising problems are hindering the effort.

Democrats said private polls have convinced top party officials that they could pick up 40 or more seats — nearly double their internal projections from a week ago — if they spend enough money on television advertising for long-shot races. Strategists James Carville and Stan Greenberg are among those pleading with party leaders to go deep into debt to run ads in as many as 50 GOP-held districts.

Democratic Congressional Campaign Committee Chairman Rahm Emanuel (Ill.) has privately signed off on targeting a new group of GOP incumbents who were once considered safe for reelection, starting with Rep. Gil Gutknecht in rural Minnesota, officials said.

The number of seats Democrats could pick up "is expanding, no doubt about it," Emanuel said. "But you have to figure out what is smoke and what is fire."

Always the problem, isn't it? But there are some signs that all is not what it seems to be. The "top officials" appear to be missing a huge, flashing red warning light:

"It has been more difficult raising money than I expected," said Ickes, noting that his group has raised between $5 million and $10 million, half its original goal. "My sense is there is more optimism than is probably warranted," he said about Democratic prospects.

But the insiders have a goal which they are quite open about:

But Carville, Greenberg, Emanuel and others are now arguing in private deliberations that Democrats have a historic chance to not only win the House but also capture enough seats to build an effective governing majority. They are telling donors that it is worth the risk to shoot for a 40-plus seat gain, which would give Democrats a large enough majority to guarantee that they could move legislation and carry out investigations of the Bush administration.

I personally would not bet the farm on all this optimism. But if the Democrats do manage to get a huge number of seats and conduct non-stop investigations for the next two years, they can kiss the White House goodbye, probably forever. I'd be more inclined to pay attention to that big, old red light, myself. A reluctance on the part of donors means they are not buying into the hype.

Optimism Or Panic?

Seems to be the morning for questions. The Hotline describes a loan the Democratic National Committee is supposedly taking out for the Democratic Senate Coordinating Committee. They report that a $10 million line of credit (give or take) has been opened to pump cash into Senate races. They say this is 'contagious optimism' on the part of the DNC.

The DSCC's optimism about winning the Senate is apparently contagious as the DNC is going to pony up an extra $5-10M for the Senate committee, according to sources familiar with the previously reported arrangement between the two campaign orgs.

While the DNC doesn't have $10M to just toss around to another campaign committee, the DNC apparently has decided to go into debt to come up with the extra cash DSCC Chair Chuck Schumer has been pleading for from DNC Chair Howard Dean. The actual amount of the loan the DNC is taking out is not known as the committee holds out hope they can raise nearly everything they need before the election. But a line of credit has been opened.

The money is not designated for specific Senate races, however, sources tell us that two races in particular were used as leverage in negotiations between the DSCC and the DNC. Those two races: New Jersey and Virginia. Apparently the extra DNC money will help soften the financial blow the DSCC was taking by incurring the extra cost of saving Sen. Bob Menendez from the challenge of Republican Tom Kean Jr. as well also trying to target Virginia. New Jersey and Virginia sport three of the most expensive media markets in the country (NYC, Philly and DC).

The money issue came up a lot yesterday with a lot of reporting that the Republicans were, by far and away, better positioned financially going into the end of the campaign. So, one should ask: is this 'contagious optimism' or desperation? Look at the races being cited as the key levers. The Democrats are fighting desperately to hold a seat that was not even supposed to be in play this year. They are also running a massively filthy campaign against Allen in Virginia, trying to knock him off, but it looks like they need a lot of money to accomplish either. That sounds like a wee bit of panic to me.

Uniting Or Dividing?

David Ignatius asks a question in his column today that warrants some thought. In discussing the new book The Way To Win by Mark Halperin of ABC News and John F. Harris of The  Washington Post he reviews a few races around the country. He looks at the central thesis of the book that there are two main styles of politics in play and sees how the races match up.

Halperin and Harris postulate that the two approaches are the "sythesizer" one favored by Bill Clinton and the "clarifier" method of George W. Bush. Under these interpretations, Clinton tried to pull together the center while Bush tried to divide by sharpening distinctions between groups.

"Clinton Politics is the politics of the center. It holds that Americans for the most part, with the exception of irate groups at the edges, are less interested in ideology than in practical solutions to basic problems. People would prefer politics to be polite, civil, and compromise-minded."

"Bush Politics is the politics of the base," the authors continue. "A successful leader will stand forthrightly on one side of a grand argument. Then he or she will win that argument by sharpening the differences and rallying his most intense supporters to his side."

People from the Old Media, like me, instinctively prefer a centrist style of civilized debate. Of course we do, say Halperin and Harris. We are the gatekeepers of the old order. The shrill voices of the New Media — the bloggers and talk-radio hosts and other partisan megaphones that Halperin and Harris describe as the "Freak Show" — don't just threaten our beloved center. They might eventually put us out of business. (The 'Freak show' comment was the subject of a post here).

In reviewing some local races this year, Ignatius sees some people running a centrist style campaign, others not so much. Then at the end he asks the key question:

The great synthesizer himself, Bill Clinton, was out campaigning this week for Deval Patrick, a member of the Clinton Justice Department who is running for governor of Massachusetts. "Everyone knows that, somehow, the wheel has run off of our national discourse and our common life," Clinton said Monday. "And people don't want us to shout at each other any more. They want to be talked to, reasoned with, lifted up."

Is Clinton right about the country? Are Democrats doing well in this campaign season because Americans want to find their way back to the civilized center? Or are they profiting from the Democratic base's rage at George W. Bush? That's the troubling question that lingers after reading Halperin and Harris's book: If the Democrats win next month, will they be the heirs of Clinton's vision of politics or of Rove's? Are we heading for unity or even sharper division?

I don't actually agree with Halperin and Harris' interpretation all that much. I think they see Clinton in a better light than he deserves and Bush in a worse one. That aside, I don't think there really can be much of a question of how the Democrats are, in general, running this campaign. They have made a concerted effort, admitted openly, to suppress the conservative vote and split the Republican coalition. Halperin and Harris meant their book to be a guide for the 2008 elections. I think it is pretty obvious which way the Democrats plan to head.